Threshold changes

The following threshold changes have been advised by the Department for Education (DfE) for the following loans:

Undergraduate Loans - Plan 2

From 6 April 2018 the repayment threshold for borrowers who started their course on or after 1 September 2012 (Plan 2) is expected to change. This affects borrowers who originally applied for their funding in England or Wales on or after this date only (borrowers who started before this date or apply for funding in Scotland or Northern Ireland will have a (Plan 1 loan). This change is subject to parliamentary approval.

The repayment threshold is expected to change to £25,000 a year, £2,083 a month or £480 a week.

This means, from April 2018 borrowers will repay 9% of their income above the new repayment threshold. For example:

Your annual income before tax

How much you repay per month now

How much you’ll repay per month from 6 April

£21,000

£0

£0

£23,500

£18

£0

£25,000

£29

£0

£27,000

£45

£15

£30,000

£67

£37

£33,000

£90

£60

£35,000

£104

£75

£40,000

£142

£112

Generally, if your income is £25,000 or higher, the amount you'll repay will be approximately £30 less per month using the new repayment threshold.

If you’re overseas – Plan 2

To take account of differences in living costs, the repayment threshold in a foreign country may not be the same as the UK. However, the way we work out your monthly repayment remains the same, meaning that your repayment will remain 9% of your earnings above the repayment threshold for the country you’re living in.

The following table shows some of the current repayment thresholds and what these will change to from 6 April 2018 (subject to parliamentary approval):

Country

Current earning threshold

New earning threshold

Australia

£25,000

£30,000

Canada

£21,000

£25,000

Cyprus

£16,800

£20,000

France

£16,800

£25,000

Germany

£16,800

£25,000

Ireland

£16,800

£25,000

New Zealand

£21,000

£25,000

Spain

£16,800

£20,000

United States

£21,000

£25,200

The repayment threshold for all countries in the world will increase from 6 April 2018. If your current salary remains the same then the amount you repay each month will either reduce or stop if your income is below the new repayment threshold.

Undergraduate Loans - Plan 1

From 6 April 2018 the repayment threshold for borrowers who have a Plan 1 loan will rise to £18,330 a year. This affects borrowers who originally applied for their funding in:

If you’re overseas – Plan 1

To take account of differences in living costs, the repayment threshold in a foreign country may not be the same as the UK. However, the way we work out your monthly repayment remains the same, meaning that your repayment will remain 9% of your earnings above the repayment threshold for the country you’re living in.

The following table shows some of the current repayment thresholds and what these will change to from 6 April 2018 (subject to parliamentary approval):

Country

Current earning threshold

New earning threshold

Australia

£21,330

£21,995

Canada

£17,775

£18,330

Cyprus

£14,225

£14,670

France

£14,225

£18,330

Germany

£14,225

£18,330

Ireland

£14,225

£18,330

New Zealand

£17,775

£18,330

Spain

£14,225

£14,670

United States

£17,775

£18,330

The repayment threshold for all countries in the world will increase from 6 April 2018. If your current salary remains the same then the amount you repay each month will either reduce or stop if your income is below the new repayment threshold.

Subject to the change in repayment threshold being approved by parliament, the equivalent overseas thresholds will also change. More information on overseas rates will be available early next year.

Postgraduate Loan

Postgraduate Loans don’t come into repayment until 6 April 2019. The repayment threshold remains at £21,000. Postgraduate Loans will be repaid in addition to undergraduate Plan 1 or Plan 2 loans. Find out more information on repaying a Postgraduate Loan.

Mortgage Style Loans

From 1 September 2017 until 31 August 2018 the threshold for mortgage style loans will be £29,210.